As the flood of bad news continues coming in from Japan, it's heartening to see thousands of Americans have already donated to relief organizations working to bring relief to victims of the Japanese earthquake and subsequent tsunami. By the end of the weekend following the disaster, the Red Cross had already collected nearly $8 million from U.S. donors, according to the Agence France-Presse.
But despite the best intentions of donors, in the aftermath of many high-profile disasters, a significant chunk of charitable donations often goes to unsavory or badly run aid organizations and charities that end up squandering donations, or worse, pocketing them, according to Art Taylor of the Better Business Bureau's Wise Giving Alliance. From a BBB press release:
"Whenever there is a major natural disaster, be it home or abroad, there are two things you can count on. The first is the generosity of Americans to donate time and money to help victims, and the second is the appearance of poorly run and in some cases fraudulent charities," said Taylor, president and CEO of the BBB Wise Giving Alliance.
So before you whip out your debit card, checkbook or cell phone to make a donation, take a little time to look over Bankrate's tips for checking out a charity and make sure your money actually makes it to disaster victims.
In response to the tsunami disaster in 2004, there were concerns raised about many websites and new organizations that were created overnight allegedly to help victims. The BBB also offers some advice to maximize your gift's impact and avoid fraud.
- Find out if the charity has an on-the-ground presence in the disaster impact areas. Unless the charity already has staff in the affected areas, it may be difficult to get new aid workers to quickly provide assistance. See if the charity's website clearly describes what they can do to address immediate needs.
- Find out if the charity is providing direct aid or raising money for other groups. Some charities may be raising money to pass along to relief organizations. If so, you may want to consider "avoiding the middleman" and giving directly to charities that have a presence in the region. Or, at a minimum, check out the ultimate recipients of these donations to ensure the organizations are equipped to effectively provide aid.
- Be wary of claims that 100 percent of donations will assist relief victims. Despite what an organization might claim, charities have fundraising and administrative costs. Even a credit card donation will involve, at a minimum, a processing fee. If a charity claims that 100 percent of collected funds will be assisting earthquake victims, the truth is that the organization is still probably incurring fundraising and administrative expenses. They may use some of their other funds to pay this, but the expenses will still be incurred.
- Gifts of clothing, food or other in-kind donations. In-kind drives for food and clothing --while well intentioned -- may not necessarily be the quickest way to help those in need, unless the organization has the staff and infrastructure to be able to properly distribute such aid. Ask the charity about their transportation and distribution plans. Be wary of those who are not experienced in disaster relief assistance.
- Look for details when texting a donation. Beginning with the earthquake in Haiti, it's become common to send a text to make a donation. Make sure you understand the amount to be donated, and whether there will be any service fees charged to your account. Be sure the offer clearly identifies which charity will receive the donation, then check out the charity.
I'll add one more here: Consider giving an unrestricted gift to the charity you choose instead of earmarking your money specifically for Japan. That gives the charity more flexibility on how to spend the money so that if it doesn't end up being needed in Japan, it can be used to respond to the next big disaster. Felix Salmon of Reuters makes the case:
"I've just donated $400 in unrestricted funds to (Doctors Without Borders). Some of it might go to Japan; all of it will go to areas where it's sorely needed. I’d urge you to do the same, rather than try to target money at whichever disaster might be in the news today."
If you have already donated money or are planning to donate money in response to the crisis, which charity did you choose and why?